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Bahrain Pharmaceuticals and Healthcare Report Q3 2011
Business Monitor International, June 2011, Pages: 91
Business Monitor International's Bahrain Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bahrain's pharmaceuticals and healthcare industry.
BMI View: While Bahrain boasts one of the most advanced healthcare systems in the Middle East and Africa (MEA) region, recent political tensions, coupled with its small population size, will affect its attractiveness to pharmaceutical investors. Nevertheless, given the absence of a meaningful domestic base for pharmaceutical manufacturing, imports will continue to dominate the market. On the other hand, while high per-capita incomes will remain the key driver of consumption of modern pharmaceuticals and medical devices, generic drugs are expected to make more of an inroad into the market, as demographic and epidemiological factors push the authorities towards a path of cost-containment.
Headline Expenditure Projections
- Pharmaceuticals: BHD63mn (US$168mn) in 2010 to BHD69mn (US$183mn) in 2011; +9.1% in both local currency terms and US dollar terms. Forecast up marginally from Q211 due to higher government spending.
- Healthcare: BHD349mn (US$929mn) in 2010 to BHD387mn (US$1.03bn) in 2011; +10.7% in both local currency terms and US dollar terms. Forecast up marginally from Q211 due to higher government spending.
- Medical devices: BHD26mn (US$69mn) in 2010 to BHD29mn (US$76mn) in 2011; +10.6% in local currency terms. Forecast up marginally from Q211 due to higher government spending.
Business Environment Rating: Bahrain remains in third position within the MEA region in the Q311 update of our proprietary Business Environment Rating (BER) matrix. However, its composite score has fallen by 2.26% in relation to the previous quarter as its rewards are judged to be less attractive, primarily due to social unrest in the Kingdom.
Key Trends & Developments
- The online service of UK-based healthcare solution provider Patients Know Best (PKB) has been supported by at least two hospitals in Bahrain, reports Gulf Daily News. The company, launched by Bahraini doctor Mohammad Al Ubaydli in the UK, offers secure communication services with doctors and nurses, providing access to medical records and communicating the healthcare data service to patients. The services have also received a positive response from hospitals in the UAE and Malta.
BMI Economic View: Despite an aggressive ramp up in spending this year, higher oil prices and emergency financial assistance from neighbouring states in the Gulf Cooperation Council (GCC) will help keep Bahrain's budget in surplus to the tune of 1.9% of GDP in 2011. Given the expected increase in spending on defence (13% of the total fiscal expenditure, in addition to cash handouts and promises of new housing), it is apparent that the government is focused more on short-term survival than pushing through necessary long-term structural economic reforms. The Ministry of Health is slated to receive 7% of the total government spending, on a par with the Ministry of Interior. Generally speaking, with approximately 80% of total expenditure being directed towards current spending, there is little room for public investment into more productive capital spending priorities.
BMI Political View: Bahrain's political future is complicated by growing tensions between the Sunni elite and the Shi'a majority, labour and population imbalances, the need to stay on side with both Iran and Saudi Arabia and economic vulnerability. We believe the most likely long-term scenario is for democratisation to be brought about by political and economic necessity, although there is no guarantee that this will be peaceful. At the same time, given that around 50% of the population are foreign nationals – many of whom are working on short-term contracts – domestic demand is subject to volatility, which can clearly translate into the fluctuating usage of healthcare services.
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